XRP Plunges 7% as Bearish Technicals Threaten Rally: ETF Inflows Overpowered by Institutional Selling
Introduction: A Clash of Titans – Institutional Accumulation Meets Short-Term Selling Fury
In a stark demonstration of the market's complex and often contradictory forces, XRP experienced a sharp 7.2% decline to $2.05 on December 1, 2025. This plunge occurred despite a backdrop of robust and expanding institutional infrastructure supporting the token, including substantial spot ETF inflows and significant off-exchange accumulation. The price action represents a violent wave of institutional selling that overpowered these bullish fundamentals, breaking through critical technical support and forcing XRP back into its November correction range. The move underscores a pivotal battle between long-term structural demand and acute short-term liquidity pressures, setting the stage for a crucial test of investor conviction at key psychological price levels.
The Bullish Backdrop: Unprecedented Institutional Infrastructure Builds
Before analyzing the day's bearish turn, it is critical to understand the strong foundational demand that preceded it. The institutional case for XRP has been materially strengthening, creating a compelling long-term narrative.
- Spot ETF Inflows Reach $666.6 Million: A primary pillar of support has been the substantial capital flowing into XRP-focused exchange-traded funds (ETFs). Throughout November 2025, these products attracted $666.6 million in net new assets. This demand was notably led by the introduction and subsequent inflows into 21Shares' new TOXR listing, signaling growing acceptance and accessibility for traditional finance investors.
- Exchange Supply Drops 45%: Perhaps an even more telling metric is the dramatic shift in token custody. Over a 60-day period leading into early December, the supply of XRP held on known exchange wallets dropped by 45%. This large-scale withdrawal from trading platforms is widely interpreted as a sign of accumulation, where holders move assets into cold storage or custodial solutions for longer-term holding, thereby reducing immediate sell-side pressure on exchanges.
- Whale Wallets Defy Downturn: Demonstrating conviction even during price weakness, large holders classified as "whales" added approximately 150 million XRP to their balances since November 25. This activity suggests that certain deep-pocketed investors viewed the pre-breakdown prices as an accumulation opportunity, betting against the prevailing short-term trend.
The Bearish Breakdown: Technical Failure Triggers Cascading Sell-Off
Despite this strong institutional backdrop, short-term market flows turned decisively negative. The catalyst was a technical breakdown that triggered automated selling and leveraged liquidations.
- Critical Support at $2.16 Fails: The most significant technical event was XRP's breakdown beneath the $2.16 level. This price had served as a pivotal support and pivot point throughout the preceding three weeks. Its decisive loss was a key signal that sellers had regained control of the short-term momentum.
- Descending Channel Confirms Bearish Structure: The breakdown pushed XRP back into a clearly defined descending channel. This pattern is characterized by consecutive lower highs, which in this instance were traced from $2.38, to $2.30, and then to $2.22. This structure reflects increasing control by bears, as each successive price bounce produced diminishing follow-through and failed to sustain upward movement.
- Volume Spikes Confirm Institutional Exit: The legitimacy of the breakdown was confirmed by trading volume, which spiked to 309.2 million XRP—more than 4.6 times the rolling average. Such an extreme surge in activity typically signals coordinated institutional exit flows rather than retail-driven noise. Throughout the session, multiple intraday retests of the $2.05 level were accompanied by volume spikes exceeding 3 million XRP, showing buyers attempting to defend this psychological floor but failing to generate a confirmed reversal.
Price Action Analysis: A Steep Decline on Historic Volume
The session's price action painted a clear picture of intense distribution and failed recovery attempts.
XRP fell from an opening level near $2.21 to an intraday low of $2.05, marking a 7.2% decline. The most aggressive selling accelerated immediately after the $2.16 support level gave way, triggering cascading liquidations into the market close. The surge in volume to 309.2 million represented a 464% increase from the daily average, providing undeniable confirmation of intense selling pressure.
On an hourly chart, candles formed within the described descending channel, exhibiting classic lower highs and tightening range behavior indicative of bearish control. Multiple attempted recoveries stalled near the $2.12 level, indicating persistent sell orders waiting at former support-turned-resistance. While buyers repeatedly absorbed dips at $2.05, their efforts lacked the momentum required to reclaim any of the broken support levels above.
Broader Market Context: A Risk-Off Tide Lowers All Boats
The selling pressure impacting XRP intensified on Tuesday as risk assets weakened broadly across financial markets. This environment contributed to thinning liquidity in the crypto sector, which can amplify downside moves.
This phenomenon was not isolated to XRP. As reported in related market coverage, crypto markets experienced significant forced liquidations recently, wiping out nearly $646 million in leveraged positions across major platforms like Binance, Hyperliquid, and Bybit—with long positions making up almost 90% of the total liquidated value. Major benchmarks like Bitcoin and Ether also fell sharply during this period, with Bitcoin dropping over 5% and Ether over 6%. This creates a challenging macro-environment for any single asset to rally against, regardless of its individual fundamentals.
Strategic Conclusion: Navigating the Pivotal Zone Between Long-Term Promise and Short-Term Pain
The current situation for XRP presents a classic conflict between long-term structural developments and short-term technical and macro headwinds. The expansion of institutional infrastructure through ETFs and the clear evidence of large-scale accumulation provide a solid foundation for future price appreciation. However, these factors have been temporarily overpowered by heavy derivatives unwinding, large-lot institutional selling, and a broader risk-off sentiment affecting digital assets.
For traders and investors, several key levels and signals are now paramount:
- The Critical Floor: Holding the $2.05–$2.00 zone is absolutely critical in the immediate term. A confirmed breakdown below this psychological and technical support exposes the larger November demand band between $1.80 and $1.87 as the next likely target.
- The Reversal Signal: To invalidate the current bearish structure and signal that accumulation is resuming in force, XRP must achieve a high-volume reclaim of the $2.12–$2.16 range. This would demonstrate that buyers have absorbed all available supply at lower levels and are ready to challenge recent highs.
- Monitoring Momentum: Early signs of a potential reversal may appear as bullish divergence on hourly momentum indicators like the Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD), where price makes a lower low but the indicator forms a higher low.
- Balancing Timeframes: Investors must balance the compelling long-term outlook supported by ETF inflows and supply scarcity against a short-term tape that remains technically heavy. Patience may be required as the market digests this distribution and searches for a new equilibrium.
The path forward for XRP hinges on whether long-term holders and institutional accumulators can continue to absorb selling pressure at these levels until short-term bearish exhaustion sets in. The clash between these two powerful forces will determine if the recent plunge is merely a pullback within a larger uptrend or the beginning of a deeper corrective phase